By Keith Swift, PhD
InterNACHI member/InterNACHI Report Writing Consultant
President, Porter Valley Software
Today, I learned on the message board that another inspector had been unjustly
sued. And the sad truth is that none of us ever expect to be sued, and certainly
not when we’re innocent of any wrong-doing. The inspector reports that he was
happy to pay the $2,500.00 deductible, and I know how he feels, but that happiness
may turn to despair if his carrier decides to cancel his policy and a second carrier
elects to double or triple his premium. Most inspectors have no idea how common
this is. The fact is we’re being victimized by a judicial system that is easily
corrupted. Anyway the response to his message was predictable, including the
“we can’t inspect what we can’t see” disclaimer, but that’s never stopped some
of us from being sued. And, as I’ve reported in my “Contracts and Standards”
article, such commonsense disclaimers are of limited value. All industry contracts
and standards were written by some of the best minds in the business, and are
continuously being edited and refined. Regardless, and for what it’s worth, I’ve
decided to share my personal contract with InterNACHI inspectors. But, before I do,
I want to make a few things absolutely clear.
A contract is supposed to be a legally binding document that is usually state-specific.
Mine is a personal document, which I wrote after reviewing many others, and which
may not be legally binding. It has never been officially read or sanctioned by
any attorney, and I certainly understand that parts of it may not hold up in court.
But, as I’ve stated many, many times, I really don’t care what happens in court
because about ninety percent of all cases are settled before they ever get to
court, and once inspectors are in court they’ve lost, even when they win. Therefore,
my intention has always been to avoid litigation by any means possible, as long
as those means are moral and ethical. I admit to having entertained homicidal
thoughts involving clients and their attorneys, but would not admit as much in
my contract. So, what you’re going to see in my contract are the standard disclaimers
and a series of clauses that I regard as being “speed bumps,” and which because
they are specifically initialed may help me to avoid litigation. They may not
hold up in court, but if they stop even one person from calling their attorney
then they work. It’s as simple as that. One last point, I’m offering my contract
as a token of respect for my fellow inspectors, which they can do with as they
please. It has certainly evolved over the years, and I am constantly tweaking
it. Interestingly, after reading the first, five-day money-back clause, you may
think that I’m nuts. Nevertheless, it has served me well over the years, and only
those people who I really wanted nothing to do with have asked for their money
back, and I was always delighted to give it to them. Also, I’m also seriously
thinking of adding another clause in which my clients agree that the “prevailing
party” shall be entitled to receive treasonable attorney fees and related expenses,
but I really would like to file a countersuit against frivolous lawsuits, but
my carrier is not big on the idea. That leaves me with my homicidal thoughts.
Regardless, please understand that I have no intention of defending my contract
or debating its value with anyone. So, for what it’s worth, here it is. Feel free
to take whatever you need.
With your authorization, [insert company name] will complete a property inspection
conducted in accordance with the standards of practice of [insert name of organization],
a copy of which is available upon request and can be read and downloaded from
the Internet at [insert web address]. The inspection is that of a generalist,
and has clearly defined limitations. It is performed on-site within a few hours,
and does not include any warranty or guaranty. By contrast, specialist inspections
take considerably longer, typically include the use of specialized instruments,
could involve sampling or destructive testing, and commonly include some form
of guaranty. Specialized inspections are essential to evaluate soil conditions,
determine structural movement, establish the quality of air and water, or reveal
the presence of harmful environmental contaminants such as radon, methane, asbestos,
lead, formaldehyde, electro-magnetic radiation, molds and fungi, and other wood-destroying
organisms, all of which are beyond the scope of a generalist inspection. Therefore,
please be aware of the limitations of a generalist inspection: It is not a termite
inspection, which is mandated as a condition of sale and performed by state-licensed
specialists. Also, it is not a code-compliance inspection and does not include
any research, such as that necessary to establish boundaries, easements, or the
issuance of permits, and it should not be used as a substitute for the Transfer
Disclosure Statement, which the sellers are required to provide by civil code.
Similarly, and in accordance with [insert name of organization] standards, [insert
name of company] does not evaluate or endorse any components that are not visually
accessible. These include, significant portions of most chimney flues, the interior
of furnace heat exchangers and air-conditioning coils, subterranean or concealed
ducts, pipes, conduits, and those within walls, floors, or ceilings, the slab
beneath carpets, the waterproof membrane beneath roofs, balconies, or shower pans,
and surfaces and components concealed by furnishings. Also, [insert company name]
does not evaluate or endorse the following specific components: computerized systems,
radio or remotely controlled components, central vacuum systems, alarm, telephone,
cable, or intercom systems, private sewage systems, private water supply systems,
water softeners, water circulating devices, water filtration or purification devices,
automatic sprinklers, the hermetic seal of dual-glazed windows or skylights, solar
systems, fire-sprinkler systems, shut-off valves that are not in daily use, elevators,
dumb-waiters, funiculars or similar mechanical means of transport, saunas, steam
showers, humidifiers, electronic air cleaners, in-line duct-motors or dampers,
washers and dryers, their valves and drain pipes, condensate pumps, thermostats,
timers, clocks, rotisseries, refrigerators, portable or free-standing appliances,
retaining walls, landscaping or landscape items, including decorative and low-voltage
lighting, portable spas, fountains and ponds, barbecues, fire-pits, pool-sweep
assemblies, in-line chlorinators, or similar devices dispensing bromine or ozone,
and the coatings on pools, spas, countertops, fixtures, appliances, decks and
walkways. In addition, Swift Inspections does not tacitly endorse or guarantee
the integrity of any structure or component that was built or installed without
permit, and which could include latent defects, or any item that may have been
subject to a manufacturer's recall. What [insert company name] provides is a conscientious
but essentially visual inspection and evaluation, recommendations for appropriate
specialist service, and any consultation that may be necessary. In return, and
in consideration of the fee, you are agreeing with your signature to abide by
the terms and conditions of this contract, including the following clauses that
you are required to initial to indicate your understanding and consent.
I agree and understand that I have five days in which to rescind this contract,
sign a "global release" absolving [insert company name] from any legal recriminations,
and become entitled to a full refund of the inspection fee.
Initials: _____
I agree and understand that I have requested [insert company name] to perform
a "generalist" inspection in accordance with [insert name of organization] standards,
which is in lieu of a "specialist" inspection that would cost more and require
the services of licensed specialists.
Initials: _____
I agree and understand that I should read the full inspection report, and follow
every recommendation for evaluation and/or service and documentation by licensed
specialists. Furthermore, I agree and understand that by failing to do so I will
violate the pre-inspection agreement, and that [insert company name] shall be
held harmless for any subsequently alleged defects or deficiencies.
Initials: _____
I agree and understand that whereas [insert company name] may report on suspicious
stains or mold-like substances, that the inspector is not an environmental hygienist
and is not licensed, qualified, or authorized to identify any purported mold or
fungi.
Initials: _____
I agree and understand that [insert company name] shall be held harmless for any defects
or deficiencies that are alleged to exist beyond a period of two full years following
the date of the inspection.
Initials: _____
I agree and understand that with the exception of undertaking sensible emergency
procedures, such as turning off water or other utilities, I will not alter, repair,
replace, correct, or modify any allegedly defect component or condition without
giving [insert company name] or their representatives the right to re-inspect
and evaluate conditions for themselves.
Initials: _____
I agree and understand that I will attempt to resolve any dispute informally.
Should such an attempt fail, I agree to submit the dispute to binding arbitration
under the rules and procedures of the [insert name of arbitration company], whether
it be a breech of contract and/or tort, and that the decision of the appointed
arbitrator shall be honored and binding on all parties and be entered in any Court
of competent jurisdiction.
Initials: _____
I agree and understand that if any part of this contract is judged to be invalid
or unenforceable by any court or arbitrator that the remaining terms and conditions
shall remain in effect and be binding on all parties.
Initials: _____
AUTHORIZATION
I have read and understood the entire pre-inspection agreement, and agree to
all of the terms and conditions therein, and authorize [insert company name] to
complete a "generalist" inspection of the property as described and defined in
the public and recognized standards of [insert name of organization].
SIGNED ______________________________ DATE _____________
